Goldman Sachs' global head of commodities research, Daan Struyven, predicts gold prices could climb to $4,900 per ounce by late next year, driven by central bank purchases and declining interest rates. However, he noted that even modest diversification moves by retail investors could amplify the upside.

"Since the 2022 freeze of Russian central bank reserves, emerging market reserve managers have received a critical lesson: they must increase gold holdings for diversification. Once stored in domestic vaults, gold becomes the only truly safe asset," Struyven stated in an interview.

He added that Goldman Sachs economists currently expect the Federal Reserve to cut rates by another 75 basis points. "A key reason why private-sector diversification could significantly boost gold prices is the relatively small size of the gold market," Struyven explained, noting that the gold ETF market is about 70 times smaller than the U.S. Treasury market—"another reason we rank gold as our top recommended long commodity."

Gold futures rose for a fourth consecutive session on Wednesday as expectations grew for a Fed rate cut next month. Recent delayed U.S. data showed September retail sales edged higher while wholesale price increases met forecasts.

Meanwhile, Soojin Kim, an analyst at MUFG Bank, noted: "The case for a policy pivot gained further momentum as Kevin Hassett, widely seen as the leading candidate for the next Fed chair, is viewed as aligned with Trump’s preference for lower borrowing costs."

According to the FedWatch tool, traders now price in an 85% probability of a December rate cut. December gold futures on COMEX rose 0.6% to settle at $4,165.20 per ounce, while December silver futures surged 3.8% to $52.916—both marking their highest settlements since November 13.